Federal Income Tax on Timber A Key to Your Most Frequently Asked Questions
|
|
- Jewel McDaniel
- 8 years ago
- Views:
Transcription
1 United States Department of Agriculture Forest Service Southern Region R8-TP 34 Revised December 2005 Federal Income Tax on Timber A Key to Your Most Frequently Asked Questions Harry L. Haney, Jr., Garland Gray Emeritus Professor of Forestry, Department of Forestry, Virginia Polytechnic Institute and State University, Blacksburg, Virginia William C. Siegel, Attorney and Forest Service Volunteer, River Ridge, Louisiana Larry M. Bishop, Forest Management and Taxation Specialist, USDA Forest Service, Southern Region, Atlanta, Georgia
2 Introduction This publication examines the most common situations noncorporate taxpayers face when calculating Federal income tax on their timber holdings. It addresses aspects of each situation using a three-column format. The columns are:, How to Qualify for Best Tax Treatment, and. The responses are necessarily brief, and taxpayers should consult the other sources of information listed at the end of this publication for a more comprehensive discussion of these issues. The major purpose of this publication is to provide taxpayers with a quick reference to the Internal Revenue Service (IRS) forms necessary when filing Federal income tax returns for forestry-related activities. Nonetheless, each taxpayer must first determine whether he or she operates his or her timber activities as an investment, a trade or business (hereafter referred to simply as business), or for personal use. The Internal Revenue Code (IRC) of 1986 and IRS regulations do not specifically define these categories. Nevertheless, investments and businesses must have a profit motive for management and operating expenses to be deductible. Profit for tax purposes occurs when income from an investment or business exceeds the expenses in a given year. Profit also includes the appreciation in value of assets. This concept is particularly relevant to timber, which increases in value through physical growth and enhanced quality even though it may not be harvested for a period of years. In addition, a business must rise to a higher level than an investment, in terms of scope, regularity, and continuity of activities. Once the determination is made, the taxpayer must report income and expenses in a consistent manner. 2
3 A Key to Your Most Frequently Asked Questions Page 1. Made a Timber Sale Capital gains or ordinary income for investors 4 Capital gains or ordinary income for a trade or business. 5 Expenses of sale... 6 Installment sales Incurred a Capital Expense Capitalization and basis... 8 Reforestation Expenses o Reforestation deduction 9 o Reforestation amortization.. 10 Depreciable assets Incurred Forestry Operating, Management, and Protection Expenses Timber management expenses, property taxes, and interest (general). 12 Timber trade or business in which you materially participate. 13 Timber trade or business in which you do not materially participate.. 14 Investment Received Cost-share Payment Included in income.. 16 Excluded from income Incurred a Timber Loss or Realized an Involuntary Gain Casualty loss.. 18 Timber theft Public condemnation.. 20 Gain from involuntary conversion
4 1. Made a Timber * Sale Capital gains or ordinary income for investors Timber held as an investment (rather than as a business) is a capital asset. Generally, profits from the sale of investment timber can be treated as a long-term capital gain. Long-term capital gain status is advantageous because it lowers tax liability; because self-employment taxes do not apply; and, whereas the offset of capital losses against ordinary income is limited to $3,000 per tax year, capital losses can offset capital gains in the same tax year without limit. An additional advantage is discussed on p. 21, Gain from involuntary conversion. Generally, the maximum long-term capital gains tax rate for timber is 15 percent (for taxpayers in the 10 or 15 percent ordinary income tax brackets, the maximum long-term capital gains rate is 15 percent). An investor may consider lump-sum timber sale proceeds long-term capital gains when certain holdingperiod requirements have been met. For purchased timber, the holding period is one year. Generally, no holding period applies to timber received through inheritance. Special holding-period requirements apply to timber received as a gift, depending on details of the transaction; but the beneficiary does not need to have held the timber for longer than 1 year. Investors may also claim capital gains under a pay-ascut contract (a Section 631(b) transaction) or by electing to treat the cutting as a sale (a Section 631(a) transaction). Net capital gains from a lump-sum timber sale are determined by deducting from the gross sale price (stumpage, or price of the standing timber) its adjusted basis, as well as any sale costs. Adjusted basis is the original cost, inheritance value, or donor s basis (gift tax is included in some instances), as adjusted for subsequent transactions. Adjusted basis is discussed in more detail on p. 8 through 11. Lump-sum timber sales for all investors are reported on Part III, Profit or Loss from Land and Timber Sales, of Form T (Timber), Forest Activities Schedule. They are also reported on the appropriate Schedule D, Capital Gains and Losses. See p. 5, for information about reporting Section 631 transactions. * The term timber" includes the parts of standing trees that could be used to manufacture lumber, pulpwood, veneer, poles, piling, crossties, chip-n-saw, and other wood products. Also included are evergreen (conifer) trees aged 6 years or older when severed from their roots and sold for ornamental purposes; e.g., Christmas trees. 4
5 1. Made a Timber * Sale Capital gains or ordinary income for a trade or business Proceeds from timber held for use in your business, or which is sold to customers, as stumpage including timber specified in a right-to-cut contract will qualify for long-term capital gains if both holding-period and method-of-disposal requirements are met. Disposal includes sales where the owner maintains an economic interest (pay-ascut sales), sells outright (lump sum sales) or elects to treat the cutting as a sale. Sole proprietors and members of a partnership whose timber holdings constitute a business may be required to pay selfemployment tax on ordinary income, but on capital gains they pay none. Generally, the maximum longterm capital gains rate for timber is 15 percent (for taxpayers in the 10 or 15 percent ordinary income tax brackets, the maximum long-term capital gains rate is 5 percent). Landowners holding timber assets, or individuals or entities that have contracted to cut timber as part of their business may generally qualify proceeds from timber disposal as a long-term capital gain. Holding-period requirements and capital gains rates apply (see p. 4, Capital gains or ordinary income for investors). When timber is cut by the owner, or his or her agent, rather than sold as stumpage, part of the proceeds also may be considered long-term capital gains, but only if he or she elects to treat the cutting as a sale and the holding period includes the first day of the owner s tax year. The part that may be considered a capital gain is the difference between the timber s adjusted basis (see p. 12 through 15) and its fair market value as stumpage on the first day of the tax year when cut, less expenses directly associated with the cutting. Net taxable gain is determined for timber stumpage disposals (either lump sum or payas-cut) by deducting from gross receipts the adjusted-basis and sale costs. When the owner cuts timber and elects to treat the cutting as a sale (a Section 631(a) transaction), net taxable gain is determined by deducting the adjusted basis (depletion allowance) from the fair market value of the standing timber on the first day of the tax year in which the cut occurs. All three types of timber disposals are recorded on Part III, Profit or Loss From Land and Timber Sales, of Form T (Timber), Forest Activities Schedule. Net gains or losses are then reported on Form 4797, Sales of Business Property, and transferred to the appropriate Schedule D, Capital Gains and Losses. The election to treat the cutting as a sale under Section 631(a) is made on Part II, of Form T (Timber), Forest Activities Schedule. * The term timber includes the parts of standing trees that could be used to manufacture lumber, pulpwood, veneer, poles, piling, crossties, chip-n-saw, and other wood products. Also included are evergreen (conifer) trees aged 6 years or older when they are severed from their roots and sold for ornamental purposes, e.g., Christmas trees. 5
6 1. Made a Timber * Sale Expenses of sale Sale expenses include the costs of timber cruising and marking, sale advertising, and log scaling. Fees paid to consulting foresters, appraisers, attorneys, and other advisors directly related to sale activities also may be included. It is essential to keep good records supported by receipts, travel logs, and other evidence tying expenses directly to sale operations or cutting activities. As the scope and scale of operations increase, a business journal and appropriate recordkeeping procedures are particularly useful. Sale expenses are deducted from the gross sale price received for timber. If the revenue is reported as ordinary income, the deduction is made on Schedule A, Itemized Deductions & Interest and Ordinary Deductions, for investors; Schedule C, Profit or Loss From Business, for sole proprietors; or Schedule F, Profit or Loss From Farming, for farm income, of Form 1040, U.S. Individual Income Tax Return. For C corporations, S corporations, partnerships, estates, and trusts the corresponding schedules and forms are used. If the revenue is reported as a capital gain, the deduction is made directly on the appropriate Schedule D, Capital Gains and Losses, for investors, or on Form 4797, Sales of Business Property, for businesses. In all cases (ordinary income or capital gains, investment, or business), sale expenses also must be reported on Part III, Profit or Loss From Land and Timber Sales, of Form T (Timber), Forest Activities Schedule. * The term timber includes the parts of standing trees that could be used to manufacturer lumber, pulpwood, veneer, poles, piling, crossties, chip-n-saw, and other wood products. Also included are evergreen (conifer) trees aged 6 years or older when they are severed from their roots and sold for ornamental purposes, e.g., Christmas trees. 6
7 1. Made a Timber * Sale Installment sales The sum of payments received by timber owners whose holdings qualify as an investment, as well as payments from any type of timber sale that are reported as ordinary income by owners who treat their holdings as a business, may be spread over any number of tax years to smooth cash flow and avoid moving into higher tax brackets. The only requirement is that at least one payment must be received after the year of sale. No payment is required in the year of sale. Payments due more than 6 months after the sale date must include interest and must not constitute constructive receipt (the ability to enjoy benefits of future income by demanding immediate payment, borrowing against it, or by other beneficial use in the present) prior to actual receipt. Installment-sale election is automatic, and payments are reported in the year received. If sale proceeds are reported as capital gains, only sales by investors, not by businesses, are permitted. The gross profit (contract price less adjusted basis and sale costs) is prorated over the time during which payments are to be received. If part of the payments received is interest, that sum must be reported as ordinary income. Form 6265, Installment Sale Income, must be filed in the year of sale regardless of how much (if any) revenue has been received that year. Form 6265 also must be filed in any subsequent year installment payment(s) is (are) received. * The term timber includes the parts of standing trees that could be used to manufacture lumber, pulpwood, veneer, poles, piling, crossties, chip-n-saw, and other wood products. Also included are evergreen (conifer) trees aged 6 years or older when they are severed from their roots and sold for ornamental purposes, e.g., Christmas trees. 7
8 2. Incurred a Capital Expense Capitalization and basis Capital assets include tree farm holdings that are purchased, inherited, received as a gift, or otherwise acquired. Examples are land, merchantable timber, premerchantable timber, buildings and equipment that have a useful life greater than 1 year, plus capital acquisition costs (e.g., legal, surveying, and cruising costs). The costs of site preparation and reforestation are also capital expenditures. Capital expenditures must be capitalized (i.e., recorded in a set of books) for recovery (deduction) as the assets are sold, worn out, become obsolete, or are used up. The amounts recorded are known as the basis. In addition to actual out-of-pocket expenditures, basis also includes the value for probate purposes (inherited assets) and the donor s basis (possibly adjusted for gift taxes) for gifted property. As additions or subtractions are made over time, the basis becomes the adjusted basis. When selling or cutting timber, or when claiming a casualty deduction (see p. 18, Timber loss or involuntary gain, Casualty loss ), capital expenditures allocated to basis - either when the property was acquired or when the cost was incurred - are deductible. Retroactive allocations to basis are permitted, subject to IRS approval. Capital assets must be allocated to appropriate accounts on Part I, Acquisitions, of Form T (Timber), Forest Activities Schedule. Allowable basis deductions for timber sales and cutting are computed on Part II, Timber Depletion, of Form T (Timber), Forest Activities Schedule. Depletion deductions not taken when the timber income is reported are lost if not taken on an amended return; they may not be offset against future timber sales or cutting. Allowable basis deductions are subtracted from gross revenues in calculating taxable income (see p. 4 through 7, Made a Timber Sale). 8
9 2. Incurred a Capital Expense Reforestation expenses o Reforestation deduction A timber owner can claim a reforestation deduction on the first $10,000 spent during the tax year for qualified reforestation expenditures. The deduction may be claimed in conjunction with reforestation amortization (see p. 10, Incurred a Capital Expense, Reforestation amortization) or independently. Qualified reforestation expenditures are direct costs incurred for timber stand establishment; e.g., site preparation, seeds or seedlings, labor, and tools (including equipment depreciation). The reforested property must be 1 acre or larger, within the United States, and capable of commercial timber production. Up to $10,000 per year of qualified reforestation expenses may be claimed (per individual, per partnership, per controlled group, and per estate). Trusts do not qualify. For investors, the reforestation deduction is reported on the adjustments to income line on the front of Form 1040, U.S. Individual Income Tax Return (line 35 for the 2004 tax year). Write RFST and the amount on this line. For sole proprietors who hold their forestlands as a business, the reforestation deduction is reported on the other expenses line on Schedule C, Profit or Loss From Business, Form 1040, U.S. Individual Income Tax Return. For farmers, the reforestation deduction is reported on the other expenses line on Schedule F, Profit or Loss From Farming, Form 1040, U.S. Individual Income Tax Return. Corresponding tax forms are used for C corporations, S corporations, partnerships, and estates. 9
10 2. Incurred a Capital Expense Reforestation expenses o Reforestation amortization A timber owner may elect to amortize (deduct) all qualified reforestation expenditures over an 84-month period (actually spanning 8 tax years due to a halfyear convention ). The election may be made independently or together with the reforestation deduction discussed on page 9. However, if the reforestation deduction is also taken, the amortization must be reduced by amount of the reforestation deduction. Generally, taxpayers gain the greatest benefit by first taking the reforestation deduction and then amortizing any reforestation expenses that exceed $10,000. Trusts qualify only for the amortization; not for the $10,000 deduction.. Qualified reforestation expenditures for amortization are the same as for the reforestation deduction discussed on p. 9. The taxpayer must elect amortization on a timely filed return (extensions included), for the year expenditures were made. The election may not be made on an amended return. Amortization deductions are subtracted from gross income, even by taxpayers reporting as investors who do not itemize deductions. Due to a tax accounting procedure known as the half-year convention, only one half the annual amortizable amount can be claimed in the year in which the costs are incurred. Hence, in the year the costs are incurred, the taxpayer deducts one-fourteenth of the qualified expenditure. In the second through the seventh tax years, oneseventh is deducted, and in the eighth tax year the final one-fourteenth is deducted. The election to amortize is made in Part VI of Form 4562, Depreciation and Amortization. The election must be done on a timely filed return (extensions included) for the tax year in which the expenditures are made. The election cannot be made on an amended return. Deductions are then itemized in Part VI of Form 4562, Depreciation and Amortization. A description of the expense must be attached to the return on Part IV, Reforestation and Timber Stand Activities, of Form T (Timber), Forest Activities Schedule, or in writing on a plain piece of paper. Deductions are then reported on Form 1040, U.S. Individual Income Tax Return, as an adjustment to income (enter RFST on line 35 on 2004 forms) for investors; as other expenses on Schedule C, Profit or Loss From Business, of Form 1040, for sole proprietor businesses; or as other expenses on Schedule F, Profit or Loss From Farming, of Form 1040, for farm income. Corresponding tax forms are used for C corporations, S corporations, partnerships, and estates. 10
11 2. Incurred a Capital Expense Depreciable assets Costs incurred for business or investment property with a service life of more than 1 year can be capitalized and recovered through depreciation. Generally, depreciation deductions are calculated using the Modified Accelerated Cost Recovery System (MACRS). Alternatively, timber owners may elect other depreciation methods when permitted and advantageous to do so (see IRS Publication 946, How to Depreciate Property ). Up to $105,000 (for 2005) of the cost of depreciable active business property (investment property excluded) may be deducted, under IRC Section 179, from active business income in the year the costs are incurred. If the taxpayer elects to use a Section 179 deduction, the property must be used in business activities more than 50 percent during each year of the entire depreciation recovery period. Note: Estates and trusts cannot elect the Section 179 deduction. If a timber owner s investments in capital assets (e.g., bridges, fences, equipment, culverts) have a useful life of more than 1 year, the costs may be recoverable using MACRS (or other permitted depreciation methods). If filing as a business, the taxpayer should maintain an active role in management of that business. (See p.13.) The recovery period for depreciation of both real and personal property is based on the midpoint of the property s useful life under the Class Life Asset Depreciation Range (CLADR). The IRS publishes CLADR values in IRS Publication 946, How to Depreciate Property. Depreciation of property is reported on Form 4562, Depreciation and Amortization, Part III (for 2004). The Section 179 election to claim up to $105,000 (for 2005) of depreciable business property is reported on Form 4562, Depreciation and Amortization, Part I. 11
12 3. Incurred Forestry Operating, Management, and Protection Expenses Timber management expenses, property taxes, and interest (general) Forestry operating, management, and protection expenses can be currently deducted from a landowner s income as limited by the passive-loss rules. (See p. 13 for the rules on those deductions.) The ordinary and necessary business or investment costs of producing a profit from timber qualify as operating expenses or carrying charges. Examples include salaries and wages, legal fees, business travel costs, costs of tools with a short useful life of less than 1 year, protection costs, timber stand maintenance expenses, property taxes, and interest on loans. Profit includes appreciation in timber value that results from growth and enhanced quality. Businesses must qualify for deduction of these costs under the passive loss rules discussed on p. 13. A taxpayer who files as a business may elect to suspend operating costs and carrying charges if the limitations discussed on p. 13 would prevent deducting them for the current tax year. They remain suspended until such time as income is received from the property in question, and/or other passively held assets, against which they may be deducted. Investors who do not itemize deductions on Schedule A may capitalize these expenditures. The election to capitalize operating expenses and carrying charges may be made for any year that the property is undeveloped (lacking commercial improvements) and unproductive (not generating income). The taxpayer should attach a written description of the nature of the carrying charges and the amount to be capitalized on a plain piece of paper. Operating expenses and carrying charges capitalized to the timber account are also reported on Part II, Timber Depletion, of Form T (Timber) Forest Activities Schedule. Taxpayers who materially participate in a trade or business see p. 13. Taxpayers who are in a trade or business but do not materially participate see p. 14. Taxpayers who are investors see p
13 3. Incurred Forestry Operating, Management, and Protection Expenses Timber trade or business in which you materially participate Under the passive loss rules, management expenses, as well as taxes and interest paid, are fully deductible against income from any source each year they are incurred by taxpayers who materially participate. Similarly, credits may offset taxes owed from any source. The passive loss rules define material participation. It is a taxpayer s regular, continuous, and substantial involvement in a business. Material participation is measured annually by the taxpayer meeting at least one of six tests. These apply conjointly to the taxpayer and spouse in managing the timber activities: (1) Participation in the activity exceeded 500 hours during the tax year. (2) Personal participation in the activity substantially constituted all material participation during the tax year. (3) Participation in the activity exceeded 100 hours during the tax year, and no other individual participated more. (4) Aggregate participation in all of the significant participation activities, including actual timber management, exceeded 500 hours during the tax year. A significant participation activity is one in which participation exceeded 100 hours during the tax year. (5) Material participation has occurred in the activity for any 5 of the preceding 10 tax years. (6) Based on facts and circumstances, participation in the activity was on a regular, continuous, and substantial basis for at least 100 hours during the tax year; no other individual participated more; and a paid manager is not employed. Sole Proprietor businesses list deductions on Schedule C, Profit or Loss from Business, of Form 1040, U.S. Individual Income Tax Return, and farmers list deductions on Schedule F, Profit or Loss From Farming, of Form 1040, U.S. Individual Income Tax Return, if timber is managed in conjunction with the farm. An excess of deductions over gross income will result in a net operating loss (NOL), making the taxpayer eligible for a 2-year carry-back to earlier tax returns or a 20- year carry-forward to future tax returns. Corresponding tax forms are used for C corporations, S corporations, partnerships, trusts, and estates. 13
14 3. Incurred Forestry Operating, Management, and Protection Expenses Timber trade or business in which you do not materially participate According to the passive loss rules, a business activity is passive if the taxpayer does not materially participate (see p. 13). Deductions are allowed only to the extent that aggregate losses (deductible expenses exceeding gross income) from all passive activities do not exceed aggregate income from those activities. Losses that cannot be deducted in a particular year may be carried forward indefinitely (suspended) to offset passive income from any source Management expenses, taxes, and interest charges associated with passive activities are deductible only against passive income. They are not deductible against income from business activities in which the taxpayer materially participates. Taxpayers who have passive income (e.g., annual land-rental, hunting-lease income) may annually deduct business expenses associated with these activities and from other passive activities from which no income was derived during the year (not to exceed aggregate passive income). Sole proprietor businesses list these deductions on Schedule C, Profit or Loss From Business, and farmers list them on Schedule F, Profit or Loss From Farming, of Form 1040, U.S. Individual Income Tax Return, if timber is managed as a passive activity in conjunction with passive farm income. Form 8582, Passive Activity Loss Limitations, may also have to be filed (refer to instructions on Form 8582). Alternatively, a taxpayer may elect to capitalize operating costs and carrying charges. The election is available in any year the property is undeveloped (lacking commercial improvements) and unproductive (not generating income). Capitalized expenses are added to the basis or the adjusted basis and are recovered by any offsetting gain from the sale or cutting of timber. The election to capitalize is done by filing with the original return (for the year the election is made) a written statement on a plain piece of paper describing the costs that are being capitalized. This election cannot be made on an amended return. 14
15 3. Incurred Forestry Operating, Management and Protection Expenses Investment For noncorporate investors, management expenses are usually miscellaneous itemized deductions that are deductible against income from any source, but only to the extent that the total of miscellaneous itemized deductions exceeds 2 percent of adjusted gross income (AGI). Deductible taxes are fully deductible against income from any source. Interest is deductible against the total net investment income from all sources. Interest not deductible in the current year may be carried forward indefinitely for deduction against investment income in future years. Investors include landowners whose timber management activities do not constitute a business. The distinction between business and investment depends on the facts and circumstances of each taxpayer as discussed on p. 13, 14. Individual investors itemize deductions on Schedule A and B, Itemized Deductions & Interest and Ordinary Dividends, of Form 1040, U.S. Individual Income Tax Return. If management expenses (other than deductible taxes and interest) are itemized, amounts under 2 percent of AGI are permanently lost. Deductions that exceed gross income do not qualify as a net operating loss. Corresponding tax forms are used for C corporations, S corporations, partnerships, trusts, and estates. Alternatively, a taxpayer may elect to capitalize deductions, but this option does not apply to management expenses below the 2 percent of AGI if the expenses above that level are deducted. The election may be made for any year that the property is undeveloped (lacking commercial improvements) and unproductive (generating no income). Capitalized expenses are added to the basis or adjusted basis, and are recovered by offsetting any gain from the sale or cutting of timber. Election to capitalize is made by filing with the original return (for the year the election is made) a written statement, on a plain piece of paper, describing the costs that are being capitalized. This election cannot be made on an amended return. 15
16 4. Received Cost-Share Payment Included in income At the taxpayer s option, some forestry incentive cost-share payments may either be included with gross income or excluded (in full or in part) from gross income. Federal programs that the IRS has approved for exclusion include the Forest Land Enhancement Program (FLEP), the Wetlands Reserve Program (WRP), the Environmental Quality Incentives Program (EQIP), and the Wildlife Habitat Incentives Program (WHIP). Cost-share payments for reforestation under the Conservation Reserve Program (CRP) are also approved for exclusion; however, the annual CRP rental payments must be reported as ordinary income. In addition, many State programs have been approved (check with your State forestry agency). Cost-share payments included in gross income qualify for the reforestation deduction and amortization (see p. 9, 10). Generally, forestry cost-share payments received for purposes other than reforestation, whose cost represents a currently deductible cost, must always be included in gross income. Such costs may then be deducted, however, subject to the passive loss rule limitations discussed on p. 13, 14, and 15. Cost-share payments included in gross income are reported as miscellaneous income on the first page of Form 1040, U.S. Individual income Tax Return for individual investors; on Schedule C, Profit or Loss From Business, of Form 1040 U.S. Individual Income Tax Return for sole proprietor businesses; or on Schedule F, Profit or Loss From Farming, of Form 1040, U.S. Individual income Tax Return for farmers. Corresponding tax forms are used for C corporations, S corporations, partnerships, trusts, and estates 16
17 4. Received Cost-Share Payment Excluded from income Gross income does not include the excludable portion of cost-share payments under Internal Revenue Code Section 126. * Any excludable portion of the payment does not qualify for reforestation amortization or $10,000 current deduction. See qualifications and the example in the next columns on this page. A taxpayer may exclude part or all of reforestation cost-share payments made under programs approved by the IRS. Excludable portions include those payments designated by the U.S. Treasury Department that do not substantially increase income from the property. Taxpayers can exclude the greater of the present value of (1) the right to receive $2.50 per acre times the number of acres, or (2) the right to receive 10 percent of the average income from the land for the 3 previous tax years. Generally, landowners with high incomes and/or expenditures for reforestation exceeding $10,000 per year gain a financial advantage by excluding the maximum amount of cost-share payments permitted from gross income. For example, suppose a taxpayer has harvested timber, receiving $400 per acre and reforestation cost-share payments the next year. At a real interest rate of 6 percent (without inflation), the present value of the right to receive $2.50 per acre is $41.67 ($2.50/.06). In contrast, the present value of the right to receive 10 percent of the average income for the 3 previous tax years is $ {[($400/3) x (.10)]/.06}. Therefore, $ is the greater amount per acre. Up to this amount of cost-share payment per acre may be excluded. Attach to the return, on a plain piece of paper, a written statement that specifically describes what cost-share payments were received and how the excludable portion was determined. * See Temporary and Proposed IRS Regulation 16A and 2. 17
18 5. Incurred a Timber Loss or Realized an Involuntary Gain Casualty loss A casualty loss is physical in nature and caused by natural or other external factors acting in a sudden, unexpected, and unusual manner. Losses may be deducted up to the adjusted-basis of the timber lost. Casualty damage includes losses from fire, windstorm, and hail. Generally, insect, disease, and drought losses do not constitute casualty damage because they do meet the suddenness criterion. However, such losses may qualify as an allowable noncasualty business or investment loss deduction. Timber loss must be traceable to an identifiable event and must have occurred suddenly and unexpectedly. The amount of loss must be established using a fair and objective procedure. Claim as a loss the difference between the adjusted basis and the amount received from salvage, if the latter is less than basis. The deduction cannot exceed the adjusted basis of the timber. Reimbursements from insurance and other anticipated recovery must be deducted in computing the loss. Report the loss on Form 4684, Casualties and Thefts. 18
19 5. Incurred a Timber Loss or Realized an Involuntary Gain Timber theft Theft losses may be deducted up to the adjusted basis of the timber stolen. To qualify for a theft deduction, a landowner must show only that the theft occurred and when it was discovered. Deduct theft losses in the year of discovery. The deduction cannot exceed the adjusted basis of the timber. Adjusted basis is computed using values current in the year the theft is discovered. Theft losses are reported on Form 4684, Casualties and Thefts. 19
20 5. Incurred a Timber Loss or Realized an Involuntary Gain Public condemnation Taking of private property by a government entity without the landowner s consent, but with compensation, is condemnation. Tax consequences are the same as if property were sold under threat of condemnation. Timberland must have been condemned or have been threatened with condemnation. If timber is cut or sold by the landowner prior to condemnation, only the land is included in the loss calculation. Reporting and Tax forms Determine the loss deduction, if any, in the same way as determining a casualty loss (p. 18). Report on Form 4684, Casualties and Thefts. 20
21 5. Incurred a Timber Loss or Realized an Involuntary Gain Gain from involuntary conversion Involuntary conversion occurs when timber is destroyed, stolen, condemned, or sold under threat of condemnation, and the landowner receives insurance payments, salvage payments, court awards, or other compensation. If a gain results from involuntary conversion, the landowner may elect to postpone paying tax on all or part of the gain. A landowner may realize gain from involuntary conversion if salvage, insurance, court awards, or other compensation exceed the adjusted basis of the timber and/or timberland that is converted. The taxable gain may be deferred for tax purposes to the extent the landowner uses the gain to replace the converted property with similar (like-kind) property. For property lost by casualty and theft, replacement must be made within 2 years following the year of loss; for property condemned for public use, it must be made within 3 years following the year of loss. File an attachment to the tax return for the year of loss stating that the election to defer gain is made, and report information on both the conversion and replacement property on a plain piece of paper. If the landowner cuts the timber (rather than selling it as stumpage), the only way to determine gain is by making a Section 631(a) election and following the necessary procedures discussed on p
22 Sources of Information Information in this publication is based on the following references and the Internal Revenue Code of Publications: Bishop, Larry M.; and Greene, J.L Tax Tips for Forest Landowners for the 2005 Tax Year. Atlanta, GA. U. S. Department of Agriculture, Forest Service, Southern Region, State and Private Forestry, Cooperative Forestry. 2p. Commerce Clearing House U.S. Master Tax Guide. CCH, Inc. Chicago: 813 p. Haney, H.L., Jr.; and Siegel, W. C Timber Income Tax. Annotated teaching notes [Revised annually]. Blacksburg, VA: The Division of Continuing Education, Virginia Tech, 243 p. Haney, H.L., Jr Taxing Questions [A Quarterly Column]. Virginia Forests. Richmond, Virginia. Haney, H.L., Jr Timber Tax Issues [A Bimonthly Column]. Forest Landowner. Atlanta, Georgia. Hoover, W.L., Timber Tax Management. FNR 80. West Lafayette, IN: Department of Forestry and Natural Resources, Purdue University, 196 p. Haney, H. L., Jr.; Hoover, W.L.; Siegel, W. C.; and Greene, John L Forest Landowners' Guide to the Federal Income Tax. Agric. Handb Washington, DC: U.S. Department of Agriculture. 157 pp. Siegel, W.C Timber and Taxes [A Quarterly Column]. National Woodlands. Washington, DC Web Sites: Internal Revenue Service: National Timber Tax Website: USDA Forest Service, Cooperative Forestry, Washington, DC: 22
23 Tax Practitioners: Tax attorneys are listed by most State bar associations. For a listing of certified public accountants, contact your State Association of Certified Public Accountants (SCPA) in your State capital. Consult a telephone directory for a listing of other tax practitioners. Foresters: Contact the local office of the State forestry organization or the local extension forester for a list of consulting foresters who are familiar with timber taxation. The Association of Consulting Foresters of America has chapters in most States. The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) (voice and TDD). To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C or call (800) (voice) or (202) (TDD). USDA is an equal opportunity provider and employer. 23
Federal Income Tax on Timber A Key to Your Most Frequently Asked Questions
United States Department of Agriculture Forest Service Southern Region R8- TP 34 April 2001 Federal Income Tax on Timber A Key to Your Most Frequently Asked Questions By: Harry L. Haney, Jr., William C.
More informationMinimizing Federal Income Tax for Forest Landowners
North Central Regional Publication 343 Revised December 2005 Minimizing Federal Income Tax for Forest Landowners MICHIGAN STATE U N I V E R S I T Y EXTENSION Minimizing Federal Income Tax for Forest Landowners
More informationFederal Income Tax on Timber
United States Department of Agriculture Forest Service Southern Region R8-TP 39 Revised November 2011 Third Edition 2011 Federal Income Tax on Timber A Key to Your Most Revised by Linda Wang USDA Forest
More informationFederal Income Tax on Timber
United States Department of Agriculture Forest Service FS-1007 October 2012 Federal Income Tax on Timber A Quick Guide for Woodland Owners Fourth Edition 2012 United States Department of Agriculture Forest
More informationTimber Income and the Federal Income Tax
Agriculture and Natural Resources Timber Income and the Federal Income Tax FSA5025 Caroll Guffey Extension Associate, Arkansas Forest Resources Center Rebecca Montgomery Field Auditor Supervisor, Arkansas
More informationFEDERAL INCOME TAXES FOR TIMBER GROWERS
NC STATE UNIVERSITY COLLEGE OF AGRICULTURE & LIFE SCIENCES FEDERAL INCOME TAXES FOR TIMBER GROWERS Contents 2 Introduction Definition of timber Gain or loss from sale of timber Gross sales receipts Minus:
More informationTax Savings on Timber Sales
Tax Savings on Timber Sales Understanding tax laws and tax incentives designed to encourage improvement and expansion of woodlands will benefit both you and the general public. Growing trees as a crop
More informationForest Landowners Guide to the Federal Income Tax
United States Department of Agriculture Forest Service Agriculture Handbook No. 731 February 2013 Forest Landowners Guide to the Federal Income Tax United States Department of Agriculture Forest Service
More informationForest Landowners Guide to the Federal Income Tax
United States Department of Agriculture Forest Service Agriculture Handbook No. 731 February 2013 Forest Landowners Guide to the Federal Income Tax United States Department of Agriculture Forest Service
More informationCasualty Loss Deductions for Tax Purposes
Casualty Loss Deductions for Tax Purposes Taxloss.cas The tremendous property damage caused by hurricane Floyd, and earlier Dennis, to homeowners and businesses has spawned numerous tax-related questions.
More informationTexas A&M Forest Service. Texas Forestry Association
Harry L. Haney, Jr., Ph.D. For the Texas A&M Forest Service And Texas Forestry Association 8:30 am 5:00 pm February 17, 2015 Lottie and Arthur Temple Civic Center Diboll, Texas Harry L. Haney, Jr., Ph.D.
More informationOperating Expenses and Carrying Charges
Definition of Operating Expenses Operating Expenses and Carrying Charges Agriculture Handbook 718, pages 38-40 Operating Expenses are the ordinary and necessary expenses associated with carrying on an
More informationForest Landowners Guide to the Federal Income Tax
United States Department of Agriculture Forest Service Agriculture Handbook No. 718 Forest Landowners Guide to the Federal Income Tax United States Department of Agriculture Forest Service Agriculture
More informationChapter 7. Deductible Losses: Casualties, Thefts, Condemnations, and Noncasualty Losses
Chapter 7. Deductible Losses: Casualties, Thefts, Condemnations, and Noncasualty Losses Losses to Timber or Forest Land If timber that you own is damaged, destroyed, or stolen, or if forest land that you
More informationEstate Planning and a Forest Landowner's Tax Plan
Fact Sheet 630 Tax and Estate Planning for Maryland Forest Landowners Forest landowners in Maryland can increase the financial returns on their forest stewardship efforts by minimizing property, income,
More informationInstructions for Form 8582 Passive Activity Loss Limitations
2007 Instructions for Form 8582 Passive Activity Loss Limitations Department of the Treasury Internal Revenue Service Section references are to the Internal rental passive activities. Overall loss is limited,
More informationAdministrative Policy Reminders. Changing Bank Accounts. Civil Rights/Discrimination Complaint Process. Nondiscrimination Statement
Farm Service Agency Annual Policy Reminders Farm Service Agency works hard to get information to you in a timely manner regarding our programs and policies. This document provides a list of important FSA
More informationNon-Financial Assets Tax and Other Special Rules
Wealth Strategy Report Non-Financial Assets Tax and Other Special Rules OVERVIEW Because unique attributes distinguish them from other asset classes, nonfinancial assets may offer you valuable financial
More informationFSA can guarantee OLs or FO loans up to $1,392,000 (amount adjusted annually based on inflation).
Guaranteed Loan Program Loan Purposes Guaranteed Ownership Loans Guaranteed Farm Ownership (FO) Loans may be made to purchase farmland, construct or repair buildings and other fixtures, develop farmland
More informationtax planning strategies
tax planning strategies In addition to saving income taxes for the current and future years, tax planning can reduce eventual estate taxes, maximize the amount of funds you will have available for retirement,
More informationOverview of Tax Consequences of Condemnation of Private Agricultural Lands
Overview of Tax Consequences of Condemnation of Private Agricultural Lands By Robert Fishman, Fishman, Larsen, Goldring & Zeitler (http://www.flgz.net/) 1 Legal Disclaimer. The information provided below
More informationInstructions for Form 4684 Casualties and Thefts
2009 Instructions for Form 4684 Casualties and Thefts Department of the Treasury Internal Revenue Service Section references are to the Internal Midwestern disaster areas (as defined in Losses You Cannot
More informationBRIEF OVERVIEW OF PENNSYLVANIA PERSONAL INCOME TAX
CHAPTER 6: BRIEF OVERVIEW OF PENNSYLVANIA PERSONAL INCOME TAX TABLE OF CONTENTS I. OVERVIEW 2 II. TAX RATE...3 III. EIGHT CLASSES OF INCOME 3 A. Gross Compensation... 3 B. Interest... 4 C. Dividends...
More informationOhio State University Extension, 2120 Fyffe Road, Columbus, OH 43210
FACT SHEET Ohio State University Extension, 2120 Fyffe Road, Columbus, OH 43210 Shale Oil and Gas Development Fact Sheet Series Income Tax Management of Oil and Gas Lease Payments Introduction Chris Zoller
More informationIREM Skill Builder: After-Tax Cash Flow Analysis
ABOUT TAXATION Taxation can have a significant impact on the cash return produced by investment real estate both during ownership and at sale. Real estate managers have a responsibility to help owners
More informationHow much financing will your farm business
Twelve Steps to Ag Decision Maker Cash Flow Budgeting File C3-15 How much financing will your farm business require this year? When will money be needed and from where will it come? A little advance planning
More informationTAX MANAGEMENT TIPS FOR FARMERS L.R. Borton Michigan State University. 2015 - Tax Planning
TAX MANAGEMENT TIPS FOR FARMERS L.R. Borton Michigan State University 2015 - Tax Planning 1. The basic management guideline is to avoid wide fluctuations in taxable income because a relatively uniform
More informationbusiness owner issues and depreciation deductions
business owner issues and depreciation deductions Individuals who are owners of a business, whether as sole proprietors or through a partnership, limited liability company or S corporation, have specific
More informationTobacco Buyout Issues: Inherited or Gifted Tobacco Quota Buyout Installment Contracts
Tobacco Buyout Issues: Inherited or Gifted Tobacco Quota Buyout Installment Contracts Guido van der Hoeven Agriculture Extension Specialist North Carolina State University T. Michael Till Extension Assistant
More informationMoving To Georgia. A Tax Guide
Moving To Georgia A Tax Guide Updated July 2012 TAX GUIDE FOR MOVING TO GEORGIA PAGE I. INTRODUCTION 1 II. MAULDIN & JENKINS 2 III. ELIGIBILITY TO DEDUCT MOVING EXPENSES 3 IV. DEDUCTIBLE MOVING EXPENSES
More informationDepreciation and Section 179 Deduction
Depreciation and Section 179 Deduction Agriculture Handbook 718, pages 29-38 1 2 What Is Depreciation Depreciation is the annual deduction to recover the cost (or other basis) of business or income-producing
More informationFarmland Preservation An Estate Planning Tool
Fact Sheet 779 Farmland Preservation An Estate Planning Tool If current trends are left unchecked, Maryland could lose 500,000 acres of farmland, forests, and other open spaces to development over the
More informationFederal Income Taxes. Chapter 11
Chapter 11 Federal Income Taxes I. Introduction...1 II. Find Expert Advice...1 III. Losses Due to Disaster...2 A. Deducting Casualty Losses...2 B. Quick Tax Refunds From Casualty Losses...2 C. Complications
More informationInstructions for Form 4626
2015 Instructions for Form 4626 Department of the Treasury Internal Revenue Service Alternative Minimum Tax Corporations Section references are to the Internal Revenue Code unless otherwise noted. Future
More informationNorth Carolina s Forestry Present-Use Valuation (PUV) Property Tax Program
Woodland Owner Notes North Carolina s Forestry Present-Use Valuation (PUV) Property Tax Program Qualified North Carolina owners of soundly managed commercial forestland have been eligible for property
More informationInstructions for Form 6251
2015 Instructions for Form 6251 Alternative Minimum Tax Individuals Department of the Treasury Internal Revenue Service Section references are to the Internal Revenue Code unless otherwise noted. General
More informationtax planning strategies
tax planning strategies In addition to saving income taxes for the current and future years, effective tax planning can reduce eventual estate taxes, maximize the amount of funds you will have available
More informationTax Implications of Yacht Charter Operations By Nick G. Tarlson, CPA, MST (Taxation)
Tax Implications of Yacht Charter Operations By Nick G. Tarlson, CPA, MST (Taxation) As a yacht owner and charter business operator, you will be subject to a number of tax rules. It is important that you
More informationHow To Get A Private Annuity
White Paper Estate Freeze Technique: Private Annuity www.selectportfolio.com Toll Free 800.445.9822 Tel 949.975.7900 Fax 949.900.8181 Securities offered through Securities Equity Group Member FINRA, SIPC,
More informationFarm Financial Management
Farm Financial Management Your Farm Income Statement How much did your farm business earn last year? There are many ways to answer this question. A farm income statement (sometimes called a profit and
More informationUnit07. Losses and Bad Debts (PAK Chapter 8) As we ve begun to examine various types of deductions, you may have noticed that an underlying
1 Unit07. Losses and Bad Debts (PAK Chapter 8) As we ve begun to examine various types of deductions, you may have noticed that an underlying motivation of much of our tax code is encouraging risk taking
More informationShareholder's Instructions for Schedule K-1 (Form 1120S)
2015 Shareholder's Instructions for Schedule K-1 (Form 1120S) Shareholder's Share of Income, Deductions, Credits, etc. (For Shareholder's Use Only) Department of the Treasury Internal Revenue Service Section
More informationProvinces and territories also impose income taxes on individuals in addition to federal taxes
Worldwide personal tax guide 2013 2014 Canada Local information Tax Authority Website Tax Year Tax Return due date Is joint filing possible Are tax return extensions possible Canada Revenue Agency (CRA)
More informationTax Implications of Farm Liquidation, Debt Forgiveness, and Bankruptcy
Tax Implications of Farm Liquidation, Debt Forgiveness, and Bankruptcy Prepared by C. Robert Holcomb, EA, Extension Educator, University of Minnesota Extension Revised December 9, 2009 Introduction: A
More information2014-2015 Tax Update: Another Year For Tax Breaks By Kurt J. Kilwein, CPA, CFP, Partner and Olga Zarney, CPA, MBT, Manager
WINTER 2014-2015 2014-2015 Tax Update: Another Year For Tax Breaks By Kurt J. Kilwein, CPA, CFP, Partner and Olga Zarney, CPA, MBT, Manager Individual Taxation Many of the tax breaks which expired at the
More informationThe Form 4562 Explained
The Form 4562 Explained Depreciation & Amortization Overview Owen E. McCafferty, CPA, Inc. Definitions and Concepts Depreciation Defined According to the IRS, Depreciation is the yearly deduction allowed
More informationTax Relief for Natural Disasters
Page 1 of 6 January 2015 Bar Bulletin Tax Relief for Natural Disasters By Amber Quintal When a disaster strikes, those affected are left to start the sometimes long and painful process of rebuilding and
More informationMy interest in real estate investment comes naturally. I. The Secrets to a Tax Free Life with Real Estate Investment BY LARRY STONE, CPA CTC
Chapter Five The Secrets to a Tax Free Life with Real Estate Investment BY LARRY STONE, CPA CTC My interest in real estate investment comes naturally. I inherited it from my father and grandfather. Both
More informationSupplement to IRA Custodial Agreements
Supplement to IRA Custodial Agreements Effective December 31, 2014, the update below will be made to the American Century Custodial agreements for the following retirement accounts: Traditional IRAs, Roth
More informationSmall Business Tax Saving Strategies for the 2012 Filing Season
Small Business Tax Saving Strategies for the 2012 Filing Season Few business sectors embody today s entrepreneurial spirit, drive for innovation and unwavering perseverance more than the small business
More informationHow much did your farm business earn last year?
Your Farm Ag Decision Maker Income Statement File C3-25 How much did your farm business earn last year? Was it profitabile? There are many ways to answer these questions. A farm income statement (sometimes
More informationA Guide for the Development of Purchasing Cooperatives
A Guide for the Development of Purchasing Cooperatives Abstract This report gives an overview on the variety of purchasing cooperatives that are organized for the purpose of reducing costs and improving
More informationFOREST STEWARDSHIP SERIES 22 Forest Taxation, Estate Planning, and Conservation Easements
PUBliCAtion 8252 UnivERsity of CAliFoRniA Division of Agriculture and Natural Resources http://anrcatalog.ucdavis.edu objective Understand the variety and intent of taxation by federal, state, and local
More informationHow are trusts and estates taxed for income tax purposes?
Income Taxation of Trusts and Estates How are trusts and estates taxed for income tax purposes? What are the general income tax rules for trusts? What are the general income tax rules for estates? What
More informationCharitable Giving and Retirement Assets
Charitable Giving and Retirement Assets In this issue: Basics of IRAs Retirement Plan Basics Lifetime Taxation of Distributions from Retirement Accounts Estate Taxation of IRAs and Tax-Deferred Retirement
More informationWisconsin Land Trusts
Wisconsin Land Trusts What is a Land Trust? Conservation land is essential to the health and beauty of Wisconsin. Land trusts are non-profit organizations that help protect land for public benefit. There
More informationFederal Tax Credits for Historic Preservation
Federal Tax Credits for Historic Preservation Introduction The Federal Historic Preservation Tax Incentive is described here in general terms only. More detailed information, including copies of application
More informationReduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)
Form 982 (Rev. July 2013) Department of the Treasury Internal Revenue Service Name shown on return Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) OMB No.
More informationAccounting Periods and Methods
Department of the Treasury Internal Revenue Service Publication 538 (Rev. December 2012) Cat. No. 15068G Accounting Periods and Methods Contents Introduction... 1 Reminders... 2 Accounting Periods... 2
More informationShareholder's Instructions for Schedule K-1 (Form 1120S)
2000 Department Shareholder's Instructions for Schedule K-1 (Form 1120S) Shareholder's Share of Income, Credits, Deductions, etc. (For Shareholder's Use Only) Section references are to the Internal Revenue
More informationChoosing the Right Entity for Maximum Tax Benefits for Your Construction Company
Choosing the Right Entity for Maximum Tax Benefits for Your Construction Company Timely re-evaluation of choice of entity will enhance the shareholder value of your contractor client By Theran J. Welsh
More informationNumber, street, and room or suite no. If a P.O. box, see the instructions. City or town, state or province, country, and ZIP or foreign postal code
Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity U.S. Return of Partnership Income For calendar year 2015, or tax year beginning, 2015, ending, 20. Information
More informationThe 3.8% Medicare Surtax on Investment Income
Wealth Strategy Report The 3.8% Medicare Surtax on Investment Income OVERVIEW Beginning in 2013, certain investment income will be subject to an additional 3.8% surtax, enacted as part of the Health Care
More informationTaxation of Nonresidents and Individuals Who Change Residency
State of California Franchise Tax Board Taxation of Nonresidents and Individuals Who Change Residency FTB Publication 1100 (REV 04-2014) For forms and information, go to ftb.ca.gov and search for forms
More informationGifting: A Property Transfer Tool of Estate Planning
Gifting: A Property Transfer Tool of Estate Planning by Marsha A. Goetting, Ph.D., CFP, CFCS, Professor and Extension Family Economics Specialist; and Joel Schumacher, Extension Economics Associate Economics
More informationInstructions for Schedule D (Form 1065)
2014 Instructions for Schedule D (Form 1065) Capital Gains and Losses Department of the Treasury Internal Revenue Service Section references are to the Internal Revenue Code unless otherwise noted. Future
More informationMCCLANAHAN & EATON, LLC CERTIFIED PUBLIC ACCOUNTANTS
, LLC CERTIFIED PUBLIC ACCOUNTANTS It's that time of year where we should think about preparing an estimate of your current year tax liability and see if we can reduce that liability. There are several
More informationEffect of Taxes and Financial Incentives on Family-Owned Forest Land
Effect of Taxes and Financial Incentives on Family-Owned Forest Land John L. Greene, Thomas J. Straka, and Tamara L. Cushing 1 Key Findings Federal and State taxes reduce the pre-tax value of family-owned
More informationA Landowner s Guide to Forestry in South Carolina
A Landowner s Guide to Forestry in South Carolina This guide is provided courtesy of the South Carolina SFI Committee in conjunction with the South Carolina Forestry Association. The committee is a coalition
More informationCITY OF TULLAHOMA SMALL BUSINESS REVOLVING LOAN FUND
CITY OF TULLAHOMA SMALL BUSINESS REVOLVING LOAN FUND The Small Business Revolving Loan Program is an economic development tool administered by the City of Tullahoma. The program can provide loans for small
More informationProposed Washington Capital Gains Tax HB 1484/SB 5699. Frequently Asked Questions
Proposed Washington Capital Gains Tax HB 1484/SB 5699 Governor Inslee is proposing a capital gains tax on the sale of stocks, bonds and other assets to increase the share of state taxes paid by Washington
More informationFor most, the home is usually the major asset.
Community Development EP-9-12 Basic Estate Planning Fact Sheet Series Sale of Residence James C. Skeeles, Ph.D. Extension Educator Emeritus in Agriculture and Natural Resources and Community Development
More informationThe Impact of Proposed Federal Tax Reform on Farm Businesses
The Impact of Proposed Federal Tax Reform on Farm Businesses James M. Williamson and Ron Durst United States Department of Agriculture Economic Research Service Washington, DC Poster prepared for presentation
More informationU.S. Income Tax Return for an S Corporation
Form 1120S U.S. Income Tax Return for an S Corporation Do not file this form unless the corporation has filed or is attaching Form 2553 to elect to be an S corporation. Information about Form 1120S and
More informationBasics of accounting Documentation basics Choosing an accounting system Common tax issues Get an advisor!!!
Basics of accounting Documentation basics Choosing an accounting system Common tax issues Get an advisor!!! Money TRANSACTIONS CHART OF ACCTS GENERAL LEDGER BALANCE SHEET INCOME STATEMENT FINANCIAL STATEMENTS
More informationBenefits of USDA Programs
Benefits of USDA Programs Mr. Dwight Guy, Mr. Phil Estes, Mr. Kenneth Hitch, and Mr. Wil Hundl USDA - 69 - - 70 - - 71 - - 72 - - 73 - - 74 - You are here: FSA Home / About FSA All FSA Information For...
More informationDESCRIPTION OF THE PLAN
DESCRIPTION OF THE PLAN PURPOSE 1. What is the purpose of the Plan? The purpose of the Plan is to provide eligible record owners of common stock of the Company with a simple and convenient means of investing
More informationInstructions for Form 8582-CR (Rev. January 2012)
Instructions for Form 8582-CR (Rev. January 2012) For use with Form 8582-CR (Rev. January 2012) Passive Activity Credit Limitations Department of the Treasury Internal Revenue Service Section references
More informationInstructions for Completing Wisconsin Schedule I 2014
NOTE An individual who elects to claim a different amount of Internal Revenue Code sec. 179 expense deduction for Wisconsin than for federal tax purpose may use Schedule I to report that election. For
More informationEstimating Cash Rental Rates for Farmland
Estimating Cash Rental Rates for Farmland Tenant operators farm more than half of the crop land in Iowa. Moreover, nearly 70 percent of the rented crop land is operated under a cash lease. Cash leases
More informationLower Your Property Taxes With Clean And Green
Monday, October 22, 2001 The Agricultural Law Research & Education Center Lower Your Property Taxes With Clean and Green Page 1 Lower Your Property Taxes With Clean And Green This information will be updated
More informationSECTION 21 - DEFERRED GIVING PROGRAM
SECTION 21 - DEFERRED GIVING PROGRAM Policy Sequence 21-000 1 This page intentionally left blank. 2 Introduction In keeping with the long term objectives of the University, it is the policy of the Board
More informationInstructions for Form 4797
2014 Instructions for Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) Department of the Treasury Internal Revenue Service Section
More informationApril 15. That s the date most taxpayers think of as their federal tax deadline.
Dear Clients and Friends: April 15. That s the date most taxpayers think of as their federal tax deadline. However, the best date for a taxpayer to focus on is December 31. Why? You always can file an
More informationDistributions and Rollovers from
Page 1 of 6 Frequently Asked Questions about Distributions and Rollovers from Retirement Accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one
More informationFYI Income 11 Investment Tax Credit
Colorado Department of Revenue Taxpayer Service Division 08/10 FYI Income 11 Investment Tax Credit This publication includes information on three Colorado investment tax credits (ITC) available that relate
More informationYear End Tax Extenders?
STRAIGHT VERSION STRAIGHT VERSION DOLLARS ARCH 1C LOGO WITH TAG (KNOCKOUT) SENSE YEAR END TAX PLANNING SUMMARY FOR INDIVIDUALS ROXIMATELY WIDTH OF CIRCLE & ON ALL SIDES ARCH 1C LOGO WITH TAG (KNOCKOUT)
More informationModule 10 S Corporation/Corporation Study Guide Introduction
Module 10 Study Guide Introduction Running your own business presents many challenges. One of the most difficult is complying with complex and ever-changing tax laws. This small-business tax education
More informationMoving Expenses. Self-Employed Health Insurance. Self-Employed Pensions. Nondeductible IRAs. Health Savings Account
Moving Expenses Enter the number of miles from your OLD home to your NEW workplace Enter the number of miles from your OLD home to your OLD workplace Enter the amount you paid for transportation and storage
More informationGIVE AND YOU SHALL RECEIVE CHARITABLE GIVING, CREATING A PLAN THAT S RIGHT FOR YOU
GIVE AND YOU SHALL RECEIVE CHARITABLE GIVING, CREATING A PLAN THAT S RIGHT FOR YOU Contents 1 Give and you shall receive 3 Techniques summary 5 Planning for charitable giving NOT FDIC OR NCUA INSURED NOT
More informationThe Jobs and Growth Tax Relief Reconciliation Act of 2003: What Businesses and Investors Need to Know
VENTAPS: Venable Tax Policy Summary JUNE/JULY 2003 The Jobs and Growth Tax Relief Reconciliation Act of 2003: What Businesses and Investors Need to Know On May 28, 2003, President Bush signed into law
More informationMedicare Tax On Married Couples Filing Joint Returns
Medicare taxes for higher-income taxpayers Many changes from the 2010 Affordable Care Act are now in effect Begin planning now You ll especially want to discuss these tax provisions with your Financial
More informationInstructions for Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2))
2009 Instructions for Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) Department of the Treasury Internal Revenue Service Section
More information2013 TAX PLANNING TIPS FOR INDIVIDUALS
2013 TAX PLANNING TIPS FOR INDIVIDUALS The 2012 American Taxpayer Relief Act, which was enacted in early January 2013, was a sweeping tax package that included permanent extension of the Bush-era tax cuts
More informationAn Appraisal Tool for Valuing Forest Lands
An Appraisal Tool for Valuing Forest Lands By Thomas J. Straka and Steven H. Bullard Abstract Forest and natural resources valuation can present challenging analysis and appraisal problems. Calculations
More informationTax Treatment of Damages and Easements in Oil and Gas Operations. Presented by: James R. Browne Strasburger & Price L.L.P.
Tax Treatment of Damages and Easements in Oil and Gas Operations Presented by: James R. Browne Strasburger & Price L.L.P. Dallas, Texas Speaker Strasburger & Price, LLP 901 Main Street, Suite 4400 Dallas,
More information2010 Partner s Instructions for Schedule K-1 (Form 1065) Partner s Share of Income, Deductions, Credits, etc. (For Partner s Use Only)
2010 Partner s Instructions for Schedule K-1 (Form 1065) Partner s Share of Income, Deductions, Credits, etc. (For Partner s Use Only) Section references are to the Internal Revenue Code unless otherwise
More informationTHE GREAT HOMEOWNERS TAX BREAK
THE GREAT HOMEOWNERS TAX BREAK A full explanation of the tax exclusion on the sale of a principal residence If you currently own a home or plan to purchase one you will be overjoyed to learn about the
More informationU.S. Property and Casualty Insurance Company Income Tax Return. For calendar year 2014, or tax year beginning, 2014, and ending, 20.
Form 1120-PC Department of the Treasury Internal Revenue Service A Check if: 1 Consolidated return (attach Form 851). 2 Life-nonlife consolidated return.. 3 Schedule M-3 (Form 1120-PC) attached... U.S.
More informationAGRICULTURAL LAW AND TAXATION BRIEFS DEPARTMENT OF AGRICULTURAL AND CONSUMER ECONOMICS, UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN
Yearend Farm Tax Planning Considerations Gary J. Hoff, E.A.* Issue 07-07, November 15, Synopsis: As the end of 2007 nears, farmers may be able to save thousands of dollars of federal income tax or self
More information